This paper describes a material and new method of processing that yields pressed compacts magnetically suitable for a variety of ac applications. Small rectangular plain‐carbon steel particles with dimensions 2.0×0.51×0.15 mm are decarburized, individually insulated and uniaxially pressed using typical powder‐metallurgical techniques. In this condition the 60‐Hz losses are somewhat higher than conventional carbon steel sheet while at higher frequencies the losses are lower. This loss behavior is due to the large hysteresis‐to‐eddy current ratio,>9. The permeability of the compacts is poorer than that of carbon steel sheet. Attempts to reduce the core loss by lowering the hysteresis loss component through a series of stress‐relief annealing experiments resulted in exceptionally high losses. These high losses were attributed to large circulating eddy currents caused by local particle‐to‐particle sintering. Subsequent repressing, either uniaxial or cold isostatic, resulted in a dramatic reduction in the eddy current loss component and a total core loss superior to that of conventional carbon steel sheet. The variations in magnetic performance are related to the sample density, initial core pressing pressure, the annealing parameters, and the repressing method and pressure.